GoodBulk has refinanced its fleet by securing a new $200m loan, which should enable the shipowner to recommence dividend payments to investors, according to its chief executive.
The Monaco-based bulker company will use the new funds to refinance the full amounts outstanding under five of its six existing loans. The outfit expects to close the transaction in July.
The facilities were originally provided by European banks ABN AMRO, Credit Suisse, Danish Ship Finance and ING.
A total of nearly $209m was outstanding as of 31 March, according to GoodBulk's first-quarter report.
The new five-year loan has been provided by GoodBulk's existing lenders and will bear interest at Libor plus 2.35%, which is about 0.15% below the present spread.
This will enable the company to lower its break-even costs for the rest of this year, which should enable the company to start paying a dividend again, GoodBulk's chairman and chief executive told TradeWinds.
"We've managed to reduce all of our costs, keep an enormous part of our fleet open to the market with zero investment," John Michael Radziwill summarised.
"In fact, we paid a dividend in February [for 2019] and we were not forced to cover our fleet in the market at an inopportune time. We can be prepared for the rising market, which we've got now."
Weak markets have forced GoodBulk to suspend its quarterly dividend so far this year, after paying out around $100m to shareholders last year.
The new loan will not begin to amortise until January 2021, which Radziwill explained was a deliberate decision.
"We're in the middle of a pandemic. We're very positive about the market going forward, but there are entities out there getting forbearance from banks, so we want as much forbearance as we can possibly get in the form of an amortisation holiday," he said.
Lowering costs
By refinancing at a lower rate, GoodBulk will see its all-in cash break-even for the second half of this year reduced by 34% to $6,922 daily.
For next year, the break-even will be reduced by $358 per day from the current $10,305 daily.
These rates will be lowered further when combined with revenue from GoodBulk's contract backlog for the rest of 2020.
GoodBulk has covered 30% of its fleet in the third quarter, which will leave 70% of its fleet (17 vessels) open to the market at $2,785 per day during the period.
It has also covered 20% of its fleet in the fourth quarter to have 80% of its fleet (19 vessels) open to the market at $5,299 daily.
"We're just showing that, with a platform like ours, you can actually make money; you can get financial betterment, and you can save a lot of costs and you don't have to make big investments in a cost-saving device like a scrubber," Radziwill commented.
CTM refinancing
But it's not just GoodBulk that's refinancing.
C Transport Maritime (CTM), the Radziwill family's private entity, has also managed to complete a refinancing, according to the GoodBulk chief, who did not give further details.
Other private shipowners will probably have done the same behind the scenes, Radziwill added.
"Across all of our portfolio companies at CTM, we were we were able to refinance them in the backdrop of everything else that's going on in the world," he said.
"We found it was just a fairly smooth process, which is just a testament to the efficiency of our platform, frankly."
Radziwill said that GoodBulk's positive track record is what made the transaction achievable.
"It's good for the evolution of the industry because we've been responsible — commercially, financially, everything else — and now our financiers have rewarded us for that responsibility," he commented.
GoodBulk’s 23 capesizes and one panamax are externally managed by CTM, which is wholly owned by the Radziwills' Brentwood Shipping.
